Perceived Environment-Economic Benefits and Factors Influencing the Adoption of Indonesian Sustainable Palm Oil Production System by Smallholder Farmers

Abstract

Palm oil industry plays a vital role in Indonesia economy. The palm oil industry can also support sustainable development since it is based on renewable natural resources. The contribution to sustainable development is hampered if oil palm production system, especially of smallholder farmers is not sustainable. Smallholder farmers consist of almost half of the total of oil palm plantations in Indonesia. The sustainability of oil palm farming of smallholder farmers may influence significantly to the overall sustainability. The adoption of Indonesia sustainable palm oil production system by smallholder farmers may improve the sustainability of oil palm farming. This study aimed to find out if perceived environment-economic benefit differed between conventional and sustainable oil palm farmers and to uncover factors affecting the adoption of Indonesia sustainable oil palm production system. The respondents were selected using a purposive sampling method, comprising of 313 conventional smallholder farmers and 167 smallholder farmers implementing Indonesian sustainable palm oil production system. A structured-questionnaire used to gather data. Descriptive statistics and logic regressions were utilized to analyse the data. The results show that the perceived environment and economic benefit is higher for farmers adopting sustainable palm oil production than conventional farmers. Several factors which were the age of farmer, formal and non-formal education, income, total land managed, the involvement of farmer in a cooperative, and environmental management did not motivate farmers to adopt Indonesian sustainable palm oil production system. While the experience of the farmers, family size, main job, involvement in farmer‘s association, doing good cultivation practice, and plantation management influenced the adoption of Indonesian sustainable palm oil production.